HARRISBURG — A PPL executive told
senators Tuesday that extending electric rate caps for consumers would
have a negative impact on his company’s plan for a third reactor unit at
the Susquehanna nuclear plant in Salem Township, Luzerne County.

“It would create regulatory uncertainty that will discourage investment
in new generation, and certainly will impact PPL’s consideration of an
additional nuclear generating unit at Susquehanna,” Bryce Shriver,
president of PPL Nuclear Development, said in testimony at a hearing
before two Senate committees. Sen. Lisa Baker, R-Lehman Township, was
one of two senators presiding at the hearing.

The hearing was about security measures at Pennsylvania’s nuclear
plants, but discussion veered into plans by all three Pennsylvania
nuclear power generators to expand production. While much of the focus
in the special legislative session on energy is on promoting solar and
wind power, several senators said Pennsylvanians need to remember that
one-third of their energy comes from nuclear power.

PPL is considering whether to apply next year to the federal Nuclear
Regulatory Commission for a license to build an additional unit at
Susquehanna. Meanwhile, the utility is seeking NRC approval to increase
the Susquehanna plant’s power output by about 20 percent above what the
plants generated when they started operating in the 1980s.

For the past decade, electric bills for consumers have been capped in
Pennsylvania. But those rate caps are set to expire at the end of 2009
and 2010, and lawmakers are concerned that will lead to sudden rate
hikes of 30 percent or more as electricity must be purchased without
caps, on the open market.

Mr. Shriver’s testimony presents a policy dilemma for Sen. Lisa Boscola,
D-Lehigh, a member of one of the committees holding the hearing. Ms.
Boscola said she supports the development of nuclear power and is
considering sponsoring a bill to provide state incentives to spur
investment in nuclear power.

“I can’t see a better way to go than nuclear for a number of reasons,”
she said.

But Ms. Boscola has been vocal about the need to extend rate caps for
two years after they would expire. She is drafting separate legislation
on that topic.

“I’m worried people are going to have sticker shock in 2010,” she said.

Testimony on security issues focused heavily on a recent event at Peach
Bottom nuclear plant in York County where security officers were
videotaped sleeping in a station “ready room.” NRC officials are
investigating the incident and Peach Bottom’s operator, Exelon Nuclear,
fired a private security firm.

PPL officials said they have an in-house security force and have spent
more than $20 million on physical security improvements at Susquehanna
since the Sept. 11, 2001, terrorist attacks.